There is some logic to Soros moves, which the Wall St. Journal reported included selling stocks and buying up gold miners.

For one, stocks are at never-before seen levels, or nearly so, and we’re about to go up (maybe) and fulfill one of our long-standing predictions around here, namely that we should continue with of buoyant market through summer until the election, but after that, whoever wins the election will be in an historical rhyme to the 1928 presidential election.

Unfortunately (for whoever wins, and not that it will matter much) the headwinds that are just around the corner for the economy will dwarf what anyone (except our subscribers and seems now Soros, too) can anticipate.

The problem, succinctly put, is a coming confluence of difficulties.

On the innovation side, the “smartphone revolution” is already showing signs of eating its young. I told you the other day that app use is down and what do we need apps for, if a phone call will do?

Still, the unseen reality (at least by most) is that the Internet has only begun to kill brick and mortar retails. Round two of that has just launched (if you know where to look) and we will feature that in Saturday’s Peoplenomics report this week. The working title of the article?

“Barbarians at the Mall.”

You will love it…unless you work in construction, own commercial real estate, are in retail sales, or…well, let’s just say it’s a long and impressive list.

The next problem is automation. I hope you saw the report the other day that half of the world’s working population could be displaced by robotics in the next couple of decades?

Then there is the collapse of manufacturing in general. Smartphone have made micro-housing rational. So what used to be a 2,300 square foot family home can be a 250 SF apartment where the occasional hookup happens. Kids? Who needs them?

But that does bring us to the Big Ugly about immigration that neither the Lefties or the Righties want to address: Without a LOT more young people entering the workforce, Social Security will be on the rocks sooner than anticipated. Unfortunately, the Fools on the Hill and the Chief Fool over on Pennsylvania, have not bothered to mention that econometric models are a better justification for unauthorized immigration than babble about “right thing to do…” which it is NOT when we are the very people who bombed the shit out of the Middle East turning on the refugee mess into Europe and here in the first place.

So. Soros is getting short. He’s probably early. Thanks to a pullback today, we will use a tiny Excel app our subscribers have access to called the “brainamp.xls” and assume that if we have just broken above trend, any pullback could be seen as a small Elliott Wave 2 being complete so we start Wave 3 up. Wave 1 up was the manic buying spree from February through April.

Knowing what we do, seeing Soros is getting short, we are at once pleased and frightened of what it means.

The politicians are babes in the woods, and they are only representing the leech class in the middle that benefits from too much regulation in America. If we had some manufacturing jobs left, it would be a different story. Or, if we had leaders who had the balls to say “Screw the General Agreement on Tariffs and Trade, we are going to tax inbound products to America at levels that will result in all international trade being net equal, so that imbalances do not arise and drive national fortunes onto the rocks, while populating the wallets of the money changers.”

Even Donald Trump can’t seem to articulate this reality. But the Obamanistas and Hillaryites see it – and when you hear World leaders are afraid of Trump and other such pap, it is because Trump is a Wharton-trained economics grad who has his own billions that attest to the notion that he does understand money.

Being a charitable fellow, I would like to extend an offer to George Soros for a subscription to Peoplenomics at a very special price. FREE on the front end. I justg want 10% of the trading profit he makes when things hit the fan in late 2017 as we’re forecasting.

Not that he needs our advice: He’s already preparing. And he, like us, will perhaps take advantage of the stupid US tax laws that provide for reduced income tax for “long term capital gains.”

Situations, and mornings, like this force me to ask very difficult questions. The main one though goes something like this:

“Is America a really, really Great Country, of just the hollowed our leftovers better described as a Really, Really Stupid Country.”

I look at the three musketeers running for the White House and I think I know the answer.

Thursday is Garbage Day

Yessir…this is when the rural trash collecting truck backs up the one-lane road and collects the week’s assorted yuck.

Since everything in Universe is connected, we see linkage to markets on this garbage day:

The Japan stock market was down 0.97 percent.

Hong Kong was down only a third of a percent.

In Europe, the Krauts have soured down 1.25% when I checked.

The British Brexiteers are down 0.82% – By the way, I expect the professional sleazy ruling class to overrule the people on Brexit, anyway. It should be a Florida voting machine kind of affair. Dial-a-result.

And France is down 0.90%.

Let’s say we average it out: A decline of 1% in the US market would be 180 points on the Dow. But more important, this could kill the Dow’s run at new all-time highs for now…which means the market would fail to make a new high relative to May 2015, and then we can use the aforementioned brainamp.xls to forecast how bad things could really get.

If Soros is right with the short position, the next stop would be around 12,600 down to 11,932 on the Dow. Sure, there would be a rally from there, but then the bottom we eventually get to would be 11.763 down as far as 10,388.

While this looks (optimistically) like it would be much higher than the lows of 2009, don’t be so sure. Remember, America has been printing money hand-over-fist. Even though it doesn’t seemlike it is anywhere near the 6,500 level from that disaster, think again.

The H.6 Money Supply data says M2 is presently $12.651 trillion (plus or minus a small state). In April of 2009, it was $8.318. So money supply has gone up 52% (plus or minus a Tesla) so if we take the 2009 low and adjust for monetary growth, on Dow 6500 back then we come up with 9,885 which is within a few hundred points of what the brainamp.xls figures.

Still, we should not worry yet. Because if the Dow in the coming week or several can power through 18,120 then the upside is very rosy, indeed. And this is what the imcumbent corporate party is looking for.

Even a modest new high would set up a continuation of the rally we’re in now to the 21,000 level of the Dow in a third wave and in the vicinity of 23,000 for the fifth wave up before it all hits the fan.

All of which is terribly interesting to project when the market is sitting less than 200 points from an inflection point which could spell collapse or glorious rally-time profits. Still, one can make good money on collapse, which is the whole point of Soros.

Answer me this: Can you really trust a fellow like Soros who “talks his book?”

Or is this disinfo and Hungarian Goulash?

Middle East Hash

And we see how three hospitals being attacked in the rebel part of Allepo in Syria made the NY Times this morning. What I didn’t see mentioned in the article is how most of the mess in Syria is the making of the Nasty Nest of Neocons who are still selling regime change, despite its near total failure to result in long-term stability. And arguably they funded the wrong side and have been ever since we got what from going after Saddam Hussein, exactly?

So here is my plan: We put razor wire around our 29 acres. I figure we could shove 1,000 people into that space which pencils to $20 million. I will then turn it over to a for-profit prison group and Elaine and I will move to a mansion. Move the balance offshore…Slick Willie deal, huh?

That makes two states (The other being Tennessee which targets out of state cars) what we will go around rather than drive through. There is NOTHING civil about mis-named Civil Asset Forfeiture last. It’s just an excuse for government henchmen to steal money from people who can’t defend themselves under “color of law.”

If there’s no court proceeding to prove a crime – and cops are stealing money which is what this kind of thing amounts to – then yes dear, you are living in a police state.

“Vee vill haff order. Say, want to go for a neat-o train ride?”

In the meantime, empty out your wallet because having cash money is now a crime in Police State America….oh, don’t get me started. Wait till tomorrow.

17 Comments

He is notorious for using crowd’s stupidity for his benefit. First, he uses the crowd to amplify the wave he (alone or with other players) created; second, he rides it with good profit.

When Soros publicly short an asset, one should expect this asset will reach absolute bottom in 2-3 business days after the news(and Soros will be in long position to this asset on day 4).

I could be wrong, but I’m going long next Monday in the same asset classes which Soros just shorted.

dan on June 9, 2016 at 22:01

Citing Ok. and Tenn. fellow police officers around the country wonder why they ‘get no respect’…might it be that THEY do not ‘police’ their own….imho

Robert in WA State on June 9, 2016 at 18:22

I am personally hoping that Trump does EXACTLY what the anti-Trump pols fear: have an army of accountants TAKE A LOOK AT THE BOOKS! THAT’S why so many on the ‘freebie wagon’ fear him.

anonymous on June 9, 2016 at 17:48

Hmm…I wonder if George Soros read the GOP’S great American sellout bill that parts of it will be going into affect real soon…hmm I expected it to go seriously short after I read it..but the I might have miss understood it to.. only time will tell that is just my opinion

Ray on June 9, 2016 at 17:37

Soros has been shorting various aspects of his portfolio for over a year, as has Buffett. He is also an exchange magnate, not necessarily an extraordinary investor, but as Mr. Obama’s Regent he’s also defacto Prez, and can make policy “adjustments” to ensure the ~45% annual (after-tax) ROI he’s been netting for the last several years. Following Soros’ lead has been a very good investment philosophy since 2010; t’would not do so after the Election though, because unless Biden or Warren slither in, none of the current front-runners is especially Soros-friendly.

Asset forfeiture is theft-by-overlord, same as it has been for thousands of years. I can think of no recourse for the subjects of a government which allows its agents to steal and allows no compensatory redress by its victims, other than eventual overthrow. Given the level of today’s technology, a victim can no-longer steal his stuff back and disappear into Sherwood, so either the process will cease, or the sheeple will take up arms or march calmly to the train (when you eliminate the possibility of “flee” from a “fight or flee” situ, the animal is left with only “fight” or “calm resignation” as possible responses…)

{p.s. I realize this is a horrible hodge-podge of mis-matched allegories and I should be ashamed of myself, but admit it, all y’all know exactly what I meant, even if you winced at the way I said it…} ;-)

Very funny, I’d come across your website when you daughter mentioned it to me several years ago. I’m a zerohedge reader, and was surprised to think of your site today, and see the topics your writing about. Interesting stuff

JDN on June 9, 2016 at 16:55

Soros doesn’t advertise his trades……. and even if he did, no one, not even Soros can time the market, he just knows its going to happen eventually and probably sooner than later. Actually as I think about it, it would make sense for him to advertise a short trade in advance of a 3 wave and then sell the suckers his position at the top. How it works!

Jivabill on June 9, 2016 at 12:27

Well, George, here is a detailed answer to your question you posed toward the end of the first section of your column today, Is America a Great Country. Check the presentation at this You Tube link. Says it all.

Wherever did you get the idea that the neocons were even slightly interested in stability? When you see something the USA government has done to promote stability in the last 15 years, please, let us know. And 15 years is probably a conservative number.

And if they can print $600 billion for a defense budget, they sure as hell can print to cover social security. The problem is that $1500 check is only going to buy a third of what it does now.

But that will still cover my basic expenses here in Ecuador. And that doesn’t count the 10% net return we are getting on our rental property. Minimum wage here is $400 a month, and it is a living wage that will support a family of four.

gwynmarilyn on June 9, 2016 at 11:47

I am someone who is wondering if I should even vote again. I saw the ad on the side of the board. I can write in or go third party. But with all that happen this year after over 40 years of voting, I do not believe any of them any more. I wont vote for Clinton even if she would be first woman. I want the first woman to be honorable.

DrZhicago on June 9, 2016 at 10:59

All the more reason to go to law school.

earnest Rheault on June 9, 2016 at 09:54

And the Empire keeps rolling along to the Train wreck cite,

Tom Dockery on June 9, 2016 at 08:50

State governments need to do this to pay the interest and principal on their bonds.They can always screw their pensioners,but if they default they’ll be defunct.

Shayne on June 9, 2016 at 08:49

I only use cash and 1 debit card. When I travel I feel vulnerable as hell. Thanks for the heads up on OK. Nothing there I wanted to see anyhow.

Wave Crave on June 9, 2016 at 08:09

I would take exception to George’s statement, “The politicians …are only representing the leech class in the middle that benefits from too much regulation in America.”

I’m always amazed at such opinions. It’s not the weak, uneducated, impoverished, sick, minorities and immigrants who hold power and guide policy. It’s the rich, well connected and too big to fails. Just my humble opinion.

Dick on June 9, 2016 at 16:45

If you interpret “leech class” as “the weak, uneducated, impoverished, sick, minorities and immigrants”, then a different handle is needed for the middlemen George referred to as siphoning off, via regulations and such, an increasing fraction of economic wealth (and many of whom are well-connected and TBTF).